BBRI - 1H24 financial results

BBRI - 1H24 financial results Bank Rakyat Indonesia (BBRI) reported its 1H24 financial results. Net interest income grew by 6.7% yoy to IDR69,929 bn. Net premium income rose 64.4% yoy. Total opex up 8.1% yoy. PPOP increased 11.7% yoy to IDR57,043 bn. Net profit growth flattish at 0.9% yoy. Loans and financing rise 11.2% yoy. Total deposit recorded higher by 11.6% yoy. CASA and Time Deposit grew by 7.7% and 19.1% yoy, respectively. NIM shrank 0.3% to 7.64%. CIR improves 0.8% yoy. NPL gross inched up to 3.05% vs 2.95% in 1H23 and improves on quarterly basis from 3.11% in 1Q24. CoC also saw a better figure at 3.48% from 3.83% in 1Q24. (Source : Company) Comment : BBRI 1H24 PATMI came in within KBVS and consensus forecast with a run rate of 44.5%/44.0% vs. 46%. Robust top line remains (15.3% yoy), yet with the CoF adjustment made, net interest income grew by only 6.7% yoy. We like overall other income, which has supported BBRI’s PPOP to record double-digit growth of 11.7% yoy. On risk metrics, we like BBRI soaring provisions (33.8% yoy). This solid front-loaded provision should be translated to a solid foundation to enter the 2H24. Ceteris paribus, we might see softer provisions in 2H24 and thus will overall help the bank to record another inline or even stronger PATMI growth. On key ratios, NIM at 7.6% was around 28 bps yoy, and we think it is acceptable amid the unavoidable benchmark rate spike transmission to BBRI cost of deposit. CoC is in line with our expectations; it grew softer at 1.2% yoy vs. last quarter yoy growth of 1.5%. We also like BBRI’s flattish NPL gross (3.1% vs 3.0% in 6M23). Maintain BUY BBRI with GGM TP of IDR6,830 (3.0x ’24F P/B), while it’s currently trading at its average historical mean of 1x ‘24F.